WASHINGTON (MNI) – The following is the commentary from the
ICSC-Goldman Sachs Weekly Chain Store Sales Snapshot released Tuesday:
Gasoline prices at the pump dropped sharply over the last week,
while seasonably warm weather prevailed throughout the country, which
collectively provided some mixed conditions and consequently mixed
performance for retailers during this past week. Overall, for the week
ending October 20, weekly retail sales slipped by 0.7%, according to the
International Council of Shopping Centers (ICSC) and Goldman Sachs
Weekly Chain Store Sales Index. On a year-over-year basis, retail sales
improved and rose by 2.9%.
“Last week retailers saw conflicting influences affecting consumers
that resulted in sales weaker sequentially, but a tad stronger over the
year,” said Michael Niemira, ICSC vice president of research and chief
economist. “Weather was warm–and held back seasonal demand–but
gasoline prices dropped appreciably from the prior week–which was good
news for the consumers’ pocketbook. It was encouraging that even as warm
weather prevailed throughout the country, consumers still seemed to shop
more at apparel and department stores,” Niemira added.
For October, ICSC research anticipates that the sales pace will
remain consistent with an increase of 3.5% to 4.50% (excluding drug
stores).
—
The ICSC-GS consumer tracking survey found that overall customer
traffic was lower than during the prior same week of the prior year, but
department store and apparel store traffic was somewhat stronger.
Seasonal demand was adversely impacted by warm weather. According to
Weather Trends, Inc. (WTI) the U.S. average nationwide temperature was
3.3F warmer than last year and 2.9F above normal. WTI observed that
during the past week ending Saturday, it was “a very mild week for the
nation as a whole but, interestingly, there was no region in the nation
where temperatures were exceptionally warm.” The week “was the warmest
third week of October in more than 21 years,” WTI noted, and opined that
situation was an “obvious negative for seasonal category sales.”
Meanwhile, gasoline prices were supportive of stronger discretionary
spending power.
—
October Sales Expectations
U.S. comparable-chain-store sales for September posted a moderate
gain (+0.9%) as measured on a year-over-year basis by ICSC Research’s
tally of 22 major retail chain stores. Excluding the drug store sector
(because of a data anomaly), chain-store sales rose by 3.9% in September
compared with a very strong 6.0% gain in August from the same month of
the prior year. September industry sales were more subdued than in
August or relative to its year-to-date trend (+4.6%) — due to three
factors: (1) a more difficult comparison with the September 2011 sales
pace (+6.3%); (2) a more concentrated back-to-school shopping season in
August 2012 than is typical of most years when it tends to run between
mid-July and mid-September; and (3) a shifting department]store
promotion that boosted August sales pace by an estimated 0.3% higher
than trend. Looking ahead to October, ICSC Research anticipates that
comparable-store sales growth will grow between 3.5% and 4.5% excluding
drug stores or about 2.5 percentage points lower including drug stores
(that is, 1.0% to 2.0%). In September, Walgreens rejoined the Express
Scripts, Inc. pharmacy network (at mid September), but pharmacy sales
remained depressed and will likely build slowly. The industry will
largely report monthly sales for October on Thursday, November 1.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: MAUDT$,MAUDS$,M$U$$$]
